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Maya on Money is a collection of articles by financial journalist Maya Fisher-French; contributions from other authors and questions posted by readers. We encourage readers to post questions and add comments to create an interactive forum where people can gain information on how to better manage their money.

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An overseas trip doesn’t need to break the credit card

I recently returned from an overseas trip that I started planning nine months ahead of time. I used the time to plan, budget and make sure that when I returned from my well-deserved break that there would be no scary credit card bills to deal with.

One of the benefits of planning ahead is that you are able to spread your payments over time. This is how I made sure my holiday was booked and paid for before I got on the plane:

Nine months before travelling: book your airline ticket

The earlier you book your airticket the cheaper it is. I used the website travelstart.co.za which gave me the best price comparisons. I booked through my credit card for convenience and also for the free travel insurance. Another benefit of booking with a credit card is that you are also covered if the airline goes bust under a charge-back where the transaction can be reversed if the goods or services are not delivered. As I already had funds to cover the ticket, I transferred the money into my credit card. Ideally you want to already have saved the money to pay for the tickets, but if you have to spread the cost, make sure it’s only over one or two months.

Eight months before travelling: start to put money aside for spending

I calculated how much day-to-day spending money I would need and started building that up in my Virgin Money credit card. I specifically use the Virgin Money card when travelling because it is the most cost-effective option. Like most other credit cards, there is no fee to use the card at a merchant, but the advantage of the Virgin Money card is that there is no annual credit card fee and there is a flat R20 charge to draw cash overseas – by far the most cost effective card in the market. The currency conversion fee is 2.75%, which is average.

I don’t get foreign cash before leaving on an overseas trip as I just draw cash when I arrive at the airport (although this once did backfire when the ATM was offline). I also don’t find the pre-paid currency travel wallets that cost effective. But my main issue is that for both foreign cash and travel wallets you have to fill in forms with the bank and provide your airticket and passport – it’s just an unnecessary additional hassle. The risk is that our currency takes a nose-dive during your trip, but it could also strengthen. I take the view that I have already spread my risk by paying for my trip over nine months.

Six months before travelling: book your accommodation

Now that your ticket is booked and paid for, you can pay for your accommodation. Airbnb has made travel so much cheaper but I also used websites like booking.com and tripadvisor.com to get realistic reviews on places to stay. In some cases you can just pay a deposit but I opted to pay the accommodation in full (refundable if I cancel before a certain time) as this took away currency risk. With the rand so volatile I used an opportunity of rand strength to effectively peg the cost of accommodation. It also means that six months before I leave, both my accommodation and flights are paid for.

Three months before travelling: book car hire/transport

Again this is about spreading out the cost of the overseas trip and also taking advantage of rand strength. If you are using reputable global car rental agencies, you can comfortably book online and make payment. There is a refund option if you cancel in time. I always opt for the full insurance package with no excess. It is a lot more to pay, but once when a driver went into the back of me while I was travelling abroad, I was very glad I didn’t have to worry about handling the excess in a foreign currency! I also included wi-fi in the car – this allowed me to use my phone for navigation and generally provide free wi-fi.

I also booked a train trip online with a great online booking service loco2.com which covers and compares all modes of transport around Europe and the UK.

One month before travelling: book your tourist activities

Most major tourist sites allow you to book tickets online and this way you also get to jump the booking queue. Many top attractions have timed entry tickets which can actually sell out weeks in advance, so it makes sense to get in early. A month before you travel you should already have a good idea about your itinerary, since you’ve already been researching for eight months!

A week before you travel: sort out insurance

You will receive free travel insurance on your credit card so make sure you have the relevant contact numbers on your phone. Also make sure you know what the insurance covers and whether it is worth topping up. Most free travel insurance is fairly basic and has limits to the cover provided. Make sure you read the fine print, like the fact that you are not covered if you are 75 or older or for pre-existing health issues. Top-up insurance provides higher levels of cover, including cover for pre-existing conditions, no/less excess payable on claims and also additional benefits such as cover for loss of baggage, travel documents and cash.

Also inform your medical scheme that you’ll be travelling abroad – they will cover medical expenses up to a certain point and may also offer free travel insurance, which I signed up for.

This is also a good time to inform your bank you will be overseas as any transactions on your card outside of the country may trigger a fraud investigation and you could find your card has been stopped.

With careful planning and budgeting, an overseas trip does not need to turn into a financial liability.

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